CONCORD, ONTARIO--(Marketwire - Feb. 2, 2010) - Epsilon Energy Ltd. ("Epsilon" or the "Company") (TSX:EPS) today provided an update regarding the proposed Joint Venture between Epsilon and Chesapeake Energy Corporation (NYSE:CHK) ("Chesapeake"). As previously announced, on January 18, 2010 a letter of intent was signed between Epsilon and Chesapeake for the development of Epsilon's Highway 706 Prospect in the Marcellus Shale with anticipated closing on February 1, 2010. The closing of this transaction is now pending completion of legal documentation, which both sides are working to finalize.

Zoran Arandjelovic, Epsilon's Executive Chairman, President and CEO, stated, "Both Chesapeake's and Epsilon's teams have been working diligently for the last two weeks towards completion of the necessary paperwork. Given the size and complexity of the transaction, we want to be sure that all issues are appropriately addressed and our partnership with Chesapeake commences smoothly."

Epsilon Energy Ltd. is engaged in the exploration and production of natural gas reserves targeting the Marcellus Shale. The company also has participating interests and production sharing agreements in other natural gas and oil plays within North America, the Middle East, and Africa. Established in 2005, the Corporation has been a producer of natural gas and oil since 2006. Epsilon's ongoing business strategy involves focused targeting of lower risk natural gas properties within the Marcellus Shale and other parts of Canada and the United States, as well as the high potential oil & gas properties in the Middle East and Africa. The common shares of Epsilon trade on The Toronto Stock Exchange under the symbol "EPS". Further information is available at www.epsilonenergyltd.com.

Forward-Looking Statements

Certain statements contained in this news release constitute forward looking statements. The use of any of the words "anticipate", "continue", "estimate", "expect", 'may", "will", "project", "should", 'believe", and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements are based on reasonable assumption but no assurance can be given that these expectations will prove to be correct and the forward-looking statements included in this news release should not be unduly relied upon.

Special note for news distribution in the United States

The securities described in the news release have not been registered under the United Stated Securities Act of 1933, as amended, (the "1933 Act") or state securities laws. Any holder of these securities, by purchasing such securities, agrees for the benefit of Epsilon Energy Ltd. (the "Corporation") that such securities may not be offered, sold, or otherwise transferred only (A) to the Corporation or its affiliates; (B) outside the United States in accordance with applicable state laws and either (1) Rule 144(as) under the 1933 Act or (2) Rule 144 under the 1933 Act, if applicable.